8. Treasury Core Functions

[Pages:67]8. Treasury Core Functions

Marco Cangiano Rome, February 6-8, 2017

Outline

? The role of the treasury ? Budget execution and expenditure control ? Cash management and link to debt management ? The Treasury Single Account ? Conclusions

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The role and functions of the treasury

Treasury's role in the budget cycle

Treasury's Domain

Source: The World Bank, "Public Expenditure Management Handbook", 1998

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Traditional role of treasury

? Payment processing - cash and cheques ? Revenue collection and recording ? Maintaining public bank account(s) - the

Treasury Single Account concept ? Some treasuries performed a pre-audit

function (and still do in some countries) - This

may have been as simple as appropriation control or also involved review of whether payments represented the proper use of public money

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Evolving role of treasuries

? Automated accounting systems have made many of the traditional activities redundant

? Electronic payments and collection of revenues ? often real time

? Replacement of the pre-audit function with system based controls in accounting systems

? The traditional paymaster (processing) function largely no longer required

? Much of the traditional role of the Treasury has either been devolved to MDAs or automated

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Evolving role of treasuries (2)

? Provision of a modern IFMIS or central accounting system - This brings with it the need for an effective CoA supplemented with clear accounting policies

? Shift from passive to active cash management ? Decentralised controls is a feature of many modern Treasury

systems ? An enhanced reporting and accounting function ? Greater emphasis on compliance with accounting standards and

competent fiscal and statistical reporting

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Core treasury functions

? Processing of payments ? Accounting for government transactions and preparing consolidated fiscal statements

of general government ? Managing government payroll ? Applying internal control regulations, both on transactions and commitments ? Cash management and oversight of TSA ? Managing the government's e-Treasury system

And in some countries:

? Setting accounting standards ? Undertaking internal audit ? Conducting debt management operations ? Management of external grants and counterpart funds; ? Managing public procurement ? Monitoring government guarantees and other contingent liabilities ? Monitoring of financial operations of extra-budgetary funds, SOEs and sub-national

governments.

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